41st Parameter Warns of Smartphone Fraud

41st Parameter, which provides fraud detection and prevention technology, is forecasting increased mobile channel cybercrime and decreased effectiveness of traditional anti-fraud tactics, owing to the rapid adoption of new mobile handsets and multiple operating systems. According to a November 2009 consumer study of US mobile phone users, 18.9% of mobile consumers now use a Smartphone, and an additional 49.2% plan to buy an advanced mobile device within the next two years. Last week, Gartner reported that Smartphone sales in Q3 2009 grew 12.8% year-on-year, reaching 41.1 million units.
The mobile channel is the fastest growing segment of the Internet today, says 41st Parameter. Founder and Chief Innovation Officer, Ori Eisen. For companies looking to increase their audience potential, conducting business with billions of mobile handsets is compelling. Unfortunately, the mobile channel is equally appealing to cybercriminals, as traditional fraud deterrents wont identify or differentiate between the growing varieties of Smartphones.
The use of cookies, cache, Flash Shared Objects and IP Geolocation for detecting and preventing online fraud are increasingly ineffective, the company says. These tactics are further degraded on mobile devices, which lack Flash and are channelled through IP blocks by telcos, causing actual location to be misrepresented. To effectively identify cybercrime activity, the company says, it is critical to understand which devices are transacting online, how frequently they appear, and the actual proximity of each as compared to where they ought to originate. 41st Parameters device intelligence technology differentiates these and many other characteristics for any Internet connected device, including all Smartphones, without any personally identifiable information.
While the use of mobile devices for transacting online continues to be an increased potential source of fraud, another tactic exploits the explosion of newly-created dedicated mobile sites as a prime target of fraudsters in the near term. A recent whitepaper on the tactics perpetrated against the mobile channel titled Mobile Banking An Easy Target for Fraud is available by request via the 41st Parameter website.